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Setting the Expectation

Thursday, August 1, 2013

When it comes to running your service department, it’s important to have measurable goals and expectations set in place. Many of these goals should be standing and should only change with changes in the economy or territory. Other goals you can set to meet expectations at the time. These can be tied to specials, training, or specific dealership targets for that quarter or year. The important part is that you’re establishing the expectation and communicating to the group what that expectation is. We’re going to look at some expectations that you can set up to keep everyone reaching for the same goal.

Service Billing Per Technician I’m sure each and every dealership can track how much revenue you make per technician. Some of you may be able to do this with the very simple equation, service revenue divided by number of technicians. Other dealers can pin point how much one specific technician brings in compared to another. However you choose to track it, it is important to set a goal based on revenue per technician. Many dealerships have looked at productivity for years but that number can be tweaked and manipulated more that the revenue number can. Regardless of how you calculate it you need to make sure that the technicians are aware what the expectation is. Making the group aware of what the expectation is means that everyone realizes that there is a goal. It will only make sure they are aware that you’re watching that, the ability to bill out their time and for them to avoid rework. This will be important in how they are compensated in the future.

Training Everyone in this industry is continually learning. New products come out all the time and there are more electronics in units now than there was even 10 years ago. Your technicians should be learning and taking advantage of training to keep up with the technology. Training is important for two reasons. First, it will help your technicians identify issues efficiently and fix equipment effectively. Second, it’s actually a great boost to morale. Nobody likes being in front of a customer when they don’t know how to fix something; it makes them feel powerless. Training will also have a direct effect on service billing as a reduction in rework and lost over quote labor. While you may be giving up billable time to train, it will come back to you in efficiently servicing your customer and creating the best technician base in your territory.

Van Cleanliness Every one of your vans on the road is a reflection of your dealership, not only on the outside but also on the inside. Making sure that there is an expectation for van cleanliness is important for the image of your dealership. I’m sure all of us have opened the door to a van and found grease and oil smeared everywhere, parts placed wherever, and an overall feel that there is no organization. Remember, if you can see it so can your customers. With that in mind make sure that you have a template of how a van should look. Parts should be well organized and the van should have a general cleanliness. Having these guidelines in place helps in a number of different ways: it makes parts on the van easier to find, technicians are more efficient on the job, and it reduces damage to parts and equipment in the vans. It sends a positive image to your customers that your dealership and its personnel are professionals. It also helps protect
dealership assets in the van, tooling and equipment in the van, and parts inventory.

Warranty Warranty is a tricky animal and many manufacturers have a stipulation on the time frame from completed job to completed claim. Add on that your dealership might represent multiple lines, which means different standards. It’s important that you let everyone in the department know what that expectation is and train each respective person for their job at hand. When it comes to the technician, make sure that their paperwork is filled out correctly and in full.

This paperwork includes any parts tagging that needs to be done for warranty parts that may need to go back to the manufacturer. Make sure that your warranty administrator understands the time table and has a structure for getting claims into the systems and getting parts back to the manufacturer. Organization is key to your warranty administrator, so working with them to create a structure not just for paperwork but also for warranty parts storage is essential to make the job effective and efficient.

Work In Process Let’s start by remembering that items in your work in process don’t make you money until they are invoiced. It’s important to make sure you’re looking at your work in process and that you’re also having dispatchers and billers go through work in process on (at least) a weekly basis. If you find orders that are taking longer than you expect make sure you and your team are getting to the bottom of it. Has paperwork been turned in? Is there a part on backorder? Was there a question that has not been answered? Work in Process directly affects a couple of different things. It can put a crunch on your ability to get warranty and fleet maintenance claims back into your
manufacture. It can have an effect on getting van replenishment done and
getting parts back on your vans to make sure your technicians can take care of another job. It also affects cash flow. If you don’t close an order for 2 weeks and then your customer has net 30 day terms then you’ve effectively given them almost a month and a half to pay for that job. Mismanaging your work in process can also add to your department’s overtime budget because for the last week of the month, quarter, or year you have that all hands on deck need to get things billed that probably should have been billed weeks before.

It’s important to make things efficient and effective for people. One way to do that is to establish expectations, whether they are the items above or issues that may directly affect your dealership. One thing is for sure if you’re not establishing an expectation and goal, then everyone is going to have their own.